Fed Begins Adding Reserves to System With Repurchase Agreements
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The Federal Reserve Bank of New York said it’s temporarily adding reserves to the banking system with “small-value” repurchase agreements as part of a program to test the central bank’s operational readiness.
The transactions, part of a series of open-market operations began in 2009, don’t represent any change in monetary policy, according to a statement yesterday on the New York Fed’s website. All eligible collateral will be able to be used in the transactions, which will be conducted with the central bank’s 21 primary dealers.